The Transparency International Pakistan report

[Neo]

The Transparency International Pakistan report

EDITORIAL (June 13 2010): The most critical finding of the 'National Corruption Perception Survey (NCPS) 2010', released by Transparency International Pakistan (Transparency International Pakistan) is that the level of corruption in Pakistan has gone up from Rs 195 billion, in 2009, to Rs 223 billion in 2010, representing a disquieting jump of Rs 28 billion in just one year, or over two billion rupees per month.

This seems unbelievable, but since a highly respected watchdog has released the data, one has to accept it. According to Transparency International Pakistan chairman Syed Adil Gilani, 70 percent of Pakistanis believe that the present coalition government of the political parties is more corrupt than the Musharraf government. Grading the sector-wise level of corruption, the Corruption Perception Survey has assigned to the police and power sector the two top slots, with land administration coming in the third place.

In another rather surprising finding, FBR, Customs and Taxation have been ranked the least corrupt departments. (This must be in relative terms.) In terms of bribery per act of corruption, land administration has been rated as the most corrupt department, where each act, on an average, involves Rs 46,414, while the cumulative average amount of bribery extorted in all other nine sectors comes to Rs 127,728. Further, "Tendering," has been adjudged as the most corrupt sector, which eats away as much as 40 percent of the country's development budget.

As Gilani has put it, corruption is the primary cause of poverty, illiteracy, terrorism, electricity and food shortages etc - the systemic demons that cannot be exorcised without rooting out corruption. Secondly, corruption has had a corrosive effect on economic growth. Among the provinces, Khyber-Pakhtoonkhwa (NWFP) tops the list in terms of corruption while Balochistan and Sindh rank second and third, with Punjab rated as comparatively the least corrupt. It has been found that the corruption percentage in Punjab has reduced from 53 percent in PML-Q's tenure to 43 percent in PML(N)/PPP government's tenure, which is reflective of the improvement in governance.

A major cause of corruption and waste of public money is the non-implementation of Public Procurement Rules. Quoting an instance, Gilani said that as a result of the transparent tendering for the transportation of sugar, the Trading Corporation of Pakistan had saved at least Rs 49.3 million, which was 40 percent lower than the cost of same work awarded last year.

The main violators of the PPRA Rules, according to Gilani, include Wapda, CDA, NHA, SECP, SBP, Customs, FIA, NLC, PID, Privatisation Commission and Utility Stores Corporation of Pakistan. The findings of the survey should serve as an eye-opener for those at the helm. The respondents have rated lack of accountability, lack of merit and low salaries, in that order, as the three major causes of corruption in Pakistan.

They also believe that the judiciary and the armed forces, too, should be subjected to the accountability check, which is how it should be; though the two institutions also have strong internal accountability mechanisms. Over 80 percent respondents believed that the media's freedom had contributed towards exposing corruption.

Institutional corruption is most prevalent in Pakistan, followed by tax evasion, which is said to run into billions of rupees. (According to the World Bank, the total tax evasion in 2007-08 stood at Rs 796 billion.) Loan defaults in public sector banking, misuse of public sector expenditure, have helped generate a massive black economy, said to be larger than the documented economy.

A report by the Anti-Corruption Establishment in 2005 had stated that in terms of amount of money changing hands, taxation departments, public sector banks, power utilities, such as Wapda, and gas providers, aside from other public sector departments, had accounted for large-scale institutional corruption. According to the report, annual tax evasion alone amounted to Rs 218 billion.

(The World Bank estimate for total tax evasion in 2007-08 was Rs 796 billion.) Experts believe that the current lawlessness, shrinkage of economy and rising poverty is a result of the corruption in the country. Since corruption is a collusive activity, operating on the age-old principle of "hang together, or you will hang separately," it has been extremely difficult to lay hands on corrupt elements, particularly in the bureaucracy, who close their ranks whenever they perceive a common threat.

Meanwhile, financial corruption in Pakistan has thrived on a nexus of the elite, ie politicians, bureaucrats and technocrats. As one analyst has put it, colluding bureaucrats have indirectly assisted in the politicisation of the civil services, which has adversely affected institution.

The government should initiate immediate steps to implement the recommendations made in the Transparency International Pakistan report. Those within the government (there is no dearth of such people) that seek to question the credentials of the Transparency International Pakistan, and its report, would do well to refer to their party's website that has a statement from their martyred leader extolling the work of the Transparency International Pakistan.

Nearly 50 percent of the corruption relates to procurement by the government and its agencies. If only that can be streamlined by enforcement of the PPRA rules, this demon can be controlled and the perception that corruption is synonymous with democracy dispelled.